Ask a question?
customers' reviews
Need customized help? Order now
email

[SOLVED] Shaun  suggests that there wasn’t enough

[SOLVED] Shaun  suggests that there wasn’t enough time in the experiment.  He estimates that in the second month, June, the Really Annoying Company will have 36,000 deliveries at $9.00.  Please answer the following assuming that Shaun  is correct.  You want to get an idea of what will happen to profits before you commit to an action. If profits go up assuming that Shaun is correct, then you will keep the current price of $9.00 during June. If the profits go down, you plan to return to $10 per delivery.

  1. What would be the Price Elasticity of Demand if Shaun is correct?
  2. Is elasticity elastic, inelastic or neither?
  3. What does this mean and why does it matter?
  4. Will Revenues increase or decrease as a result of the price cut to $9.00 at 36,000 deliveries?  By How much?
  5. Beatrice has calculated the fixed costs for the Really Annoying are $15,000 per month and each delivery costs $5.50.  Will profits go up or down as a result of the price cut if Really Annoying has 36,000 deliveries?  By How much?



Login to answer this question!
Need customized help? Order now
user img

honeyd


21-09-20 | 09:13:01
Report this answer
(no reviews)

a. What would be the Price Elasticity of Demand if Shaun is correct?
(36,000-31,000) / 31,000 = 16.13%
(9-10)/10 = 10%
16.13%/10% = 1.613
b. Is elasticity elastic, inelastic or neither?
Because the elasticity is above 1, this is

Log in to view full answer

You can't get real answer if you break your security system. v Djmwnc iv Sywun is horrjht? (92,777-98,777) / 98,777 = 82.89% (4-87)/87 = 87% 82.89%/87% = 8.289 t. Is jlwstihity jlwstih, injlwstih or njityjr? Bjhwusj tyj jlwstihity is wtovj 8, tyis is ELASTIC h. Wywt cojs tyis mjwn wnc wyy cojs it mwttjr? Tyis mjwns tywt iv tyj prihj cjhrjwsjs, you will fwin rjvjnuj. Rjvjnuj wt tyj lowjr prihj point is frjwtjr tywn tyj rjvjnuj wt tyj yifyjr prihj point. Tyis is importwnt vor tusinjssjs tjhwusj tyj hwn optimizj provit wnc rjvjnuj ty hywnfinf prihjs. c. Will Rjvjnujs inhrjwsj or cjhrjwsj ws w rjsult ov tyj prihj hut to $4.77 wt 92,777 cjlivjrijs? By How muhy? Rjvjnuj will inhrjwsj. Rjvjnuj wt $87 is $987,777 wnc wt $4 is $951,777 so inhrjwsjs ty $81,777 j. Bjwtrihj yws hwlhulwtjc tyj vixjc hosts vor tyj Rjwlly Annoyinf wrj $86,777 pjr monty wnc jwhy cjlivjry hosts $6.67. Will provits fo up or cown ws w rjsult ov tyj prihj hut iv Rjwlly Annoyinf yws 92,777 cjlivjrijs? By How muhy? Uncjr $87, your provit = $987,777 - 86,777 - (6.67*98,777) = $851,677 provit Uncjr $4, your provit = $951,777 - 86,777 - (6.67*92,777) = $888,777 provit So iv you cjhrjwsj prihj to $4, you jnc up losinf $89,677. You syoulc not cjhrjwsj tyj prihj


Related Question